Tuesday 22nd of September 2009
The government has published plans to discuss how debt management plans can be made more effective for Britons to pay their creditors, although the current option of individual voluntary arrangements (IVAs) could be useful for people who need to clear their debts as soon as possible.
Debt management plans currently reduce interest on money owed, but do not freeze it. The government wants to address whether this could be changed so interest is completely frozen.
Britons who are in serious debt may want to consider IVA help, as IVAs can currently freeze the interest on debt and prevent creditors from taking action, something the government has suggested could be introduced to debt management plans.
Justice minister Bridget Prentice says debt problems can be turned into a "nightmare" because of the constant charges and interest that comes with owing money.
However, an IVA freezes such interest, which could break the vicious circle of debt for consumers, who can then clear what they owe and make a fresh financial start.
"Debt can affect all kinds of people, especially in the current global economic downturn, and it is important that we protect people from sliding deeper and deeper into debt," Ms Prentice continues.
By Rachel Powell
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